SaaS doesn’t mean what you think it means

Kevin LindquistOctober 17, 2013 12:00 PM

This sponsored post is produced by Decisions.com.

Talk about agile development. Technology acronyms may be the most nimble creations of the tech sector to date. From SaaS (software as a service) to PaaS (platform as a service), to IaaS (infrastructure as a service), what are we supposed to make of all this? And is the acronym SaaS already obsolete?

I have heard many attempts to decipher what that first S stands for. Software, solution, subscription as a service have all been thrown at me very confidently. I am sure many of you have heard other permutations. Traditionally, most would agree the SaaS implies Software as a Service. But I think that the fundamental principle is lost on most people, especially the younger generations who have grown up with the social and integrated web.

The fundamental value-adding principle of SaaS is the removal of the hardware component of implementing a piece of software. Historically, when purchasing software, the customer would be required to host it on his or her own hardware. Software vendors, in many cases would need to come on site and install the software to ensure operability, and the total cost of ownership would increase significantly if more hardware needed to be purchased to fully implement the software. As technology progressed and enabled the delivery of software over the web (see my previous article on How workflow software could be the backbone of the future web), software vendors quickly realized that they could reduce the barriers to closing a deal if they made implementation easier and removed the hardware requirements from the total cost of ownership equation.

Like all technology trends, this value proposition is rapidly evolving. And while it is still traditionally accurate to describe SaaS as Software-as-a-Service, we are seeing the emergence of platforms as a service and even infrastructure as a service. What is the difference between SaaS, PaaS, and IaaS? Let me answer that by defining platforms and infrastructure, as Software as a Service has already been addressed above.

If you type ‘define platform’ into Google, you will see the first definition, which is “a raised level surface upon which things can stand.” Essentially this applies well. While a software platform is software itself, it is meant to provide a raised level surface, or head start upon which software applications can be built, further reducing the cost of delivering a software application by reducing the legwork or framework required when crafting a new application.

Can you guess what infrastructure-as-a-service does? It further reduces barriers to delivering software applications by removing the hardware requirements on the side of the vendor. In a SaaS model, the customer doesn’t need any hardware upon which to install the software, but it had to be put somewhere. With IaaS, now the software vendor doesn’t need any hardware upon which to deliver the software to its customers. It can purchase the ‘hardware’ as a service and deploy virtual machines and leverage multi-tenant software architecture to further reduce the cost of delivering software applications. Organizations can also use IaaS if they don’t want to manage their own data centers or if they want to reduce the management costs of the data center. Making the decision to use IaaS over maintaining a data center is difficult, and there is still much to prove.

So why does all of this matter? The point is to illustrate that services are dominating the world of software. Software vendors, like any other business, will continue to find ways to reduce operating costs, and barriers to selling their product. As rapidly as the barriers to publish content on the web have been reduced, so will the barriers to publishing SaaS on the web. Thank goodness for the acronyms that we have to guide us through that process.

Kevin Lindquist is a Crocker Innovation Fellow from Brigham Young University who is currently serving as Director of Sales and Marketing at workflow software vendor Decisions.com. You can find him on Twitter @GrowthHackerGuy or @DecisionsTweets

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